The Irish Hotels Federation has said the sector is in crisis as it struggles to cope with a 20% overcapacity of 12,000 rooms.
IHF Chief Executive John Power is looking for urgent Government assistance for the sector.
With half of Irish hotels reportedly in serious financial difficulty, the federation will hold an emergency meeting on Wednesday to discuss the crisis.
Mr Power says expansion in recent years was unsustainable and 61,000 beds are now available in hotels around the county, compared with 40,000 in 2002.
The number of hotels in the country has doubled in the last 13 years and about 100 of these were built on the back of tax breaks.
The IHF wants the State to intervene to restructure and rescue the sector.
It says a substantial number of hotels will become NAMA's and it wants a say in how the agency will deal with these businesses.
Speaking on RTÉ's Morning Ireland, Mr Power said a mechanism is needed to control how overcapacity is taken out of the market. He said the rooms should be used for another purpose for a five-year period.
He called for an adjustment in the capital allowance scheme so investors would not have to pay back any tax breaks they have already received on their investment.
He said that with Government intervention there can be a sustainable future for the sector.
The Federation says some hotels, already taken over by banks, are offering below cost deals to consumers and distorting the market for other operators.
Mr Power said: 'Hotels that were built on the basis of tax breaks now feel that they are just being supported by investors to stay in existence.'
The IHF is also calling for a substantial reduction in local authority rates charges.
